Country Garden'S Top Revenue: China'S Top 500 Real Estate Companies

Relying on the huge domestic market and the growing demand for house purchase, Chinese real estate companies have also made amazing achievements in the world.

In the list of Fortune Global 500 in 2020, country garden, a Chinese real estate enterprise, ranks 147th, while in the list of subdivided real estate, it ranks first in the world for the first time.

Besides country garden, Greenland, Vanke and Evergrande, as well as poly, China Resources and China Merchants Group, whose main business is real estate, also continue to be shortlisted.

Leading real estate companies have been on the list of the world's top 500 companies for nine years, or at least four years. The strong revenue capability brought by the scale expansion is the reason why they have been on the list for many years. In only four years, country garden has surpassed Vanke, Evergrande and Greenland to become the first in the world.

The Fortune 500, which takes revenue as the measurement index, mainly highlights the scale effect. Besides the revenue, the operation, profit and benefit level of the listed real estate enterprises, including country garden, still have much room for improvement.

The world's first real estate company changes owners

Although it has been the sales champion of domestic real estate enterprises for three years, country garden is still a new force in the world. Now, it has finally become the world's first in the list level.

The Fortune 500 was released on August, based on the Fortune Global 500. Among them, country garden ranks the first in the world. Last year, China Evergrande was still in this position.

According to the financial report, the business income of country garden will be about 485.91 billion yuan in 2019, with a year-on-year increase of 28.2%. From 2016 to 2019, the business income of country garden increased from 153.09 billion yuan to 485.91 billion yuan, an increase of 217.4%.

Abundant revenue comes from the continuous growth of sales. In 2019, the sales volume of country garden is 771.53 billion yuan, with a year-on-year increase of 5.9%. Statistics show that from 2016 to 2019, the sales volume of country garden increased by 149.8% from 308.84 billion yuan to 771.53 billion yuan.

In addition to the scale, country garden is also trying to make itself a "boss" and its profitability is in the upper and middle reaches of the industry. In 2019, country garden achieved a net profit of 39.55 billion yuan, a year-on-year increase of 14.2%, the absolute amount second only to China Shipping real estate.

From 2016 to 2019, the net profit attributable to the parent of country garden increased from 11.517 billion yuan to 39.55 billion yuan, with a cumulative increase of 243.4%.

In the list of return on net assets (ROE), which is the most important enterprise index of Warren Buffett, country garden also has an advantage. In 2019, its roe is 26.2%, ranking first among the world's top 500 real estate enterprises, surpassing Vanke, Greenland and Evergrande.

Among the Chinese companies in the comprehensive list, country garden also ranked top in roe, with Hengli Group, Taikang Insurance, Qingshan holding, country garden and China Life Insurance respectively.

Since the fourth quarter of 2018, China's real estate market has entered a downward and adjustment cycle. The interval between policy regulation and control is becoming shorter and shorter, and market volatility is becoming more and more frequent. High leverage real estate enterprises have encountered financial crisis one after another. Risk control has become one of the core propositions for the steady development of real estate enterprises.

As a leading real estate enterprise, country garden also provides reference for the industry in risk management and cash flow management. Financial report shows that in 2019, country garden's net debt ratio is 46.3%, lower than the average net debt ratio of top 50 real estate enterprises (94.1%).

As of the end of 2019, country garden's total interest bearing liabilities were 369.6 billion, of which 116.3 billion were due within one year, accounting for only 31% of the total interest bearing liabilities. The short-term cash debt ratio was 2.3 times, and there was no short-term debt repayment risk.

In addition, the operating cash flow of country garden was 14.67 billion yuan, the cash balance on hand was 268.35 billion yuan, and the bank credit line of 316.79 billion yuan was not used.

Possibility of revenue growth

In the past 30 years of urbanization, the real estate industry is undoubtedly one of the most beneficial industries. Taking this historical opportunity, China's real estate enterprises have started the world journey, and the road of the world's top 500 real estate enterprises starts from green space.

In 2012, Greenland became China's first fortune 500 company with real estate as its main business, ranking 483. After that, the scale gradually developed and expanded, and the ranking rose.

So far, Greenland has been listed in the world's top 500 for nine consecutive years. With operating revenue of $61.965.1 billion and profit of $2134.1 million, Greenland ranked 176th in the world, up 26 places from last year.

In 2015, it was the first time for Baoli group to be listed among the top 500 million central enterprises in terms of revenue. Since then, it has been on the list for six consecutive years.

This year, poly jumped to 191, up 51 places compared with last year, with revenue of $57.147.4 billion and profit of $2.030.9 billion in 2019.

In 2016, it ranked among the world's top 29.6 million with its revenue of $35.36 billion. At that time, Evergrande was one of the top 500 companies in the world, and Evergrande ranked 496.

In this year's list, Vanke ranked 208 with the operating revenue of US $53.252.7 billion and US $5.626 billion in 2019; Evergrande ranked No.152 with its revenue of US $69.127.1 billion and profit of US $2.501.3 billion in 2019.

As the fastest rising real estate company, Biguiyuan is the latest. In the past four years, the ranking has risen 320 places in a row.

The Fortune Global 500 list is ranked according to the operating revenue, and the giant real estate companies have been focusing on scale expansion after being shortlisted.

But from the operating income of real estate enterprises, the profits of real estate enterprises are not satisfactory. For example, poly, which ranks 191 with operating revenue of $57.147.4 billion, is not as profitable as Vanke, which ranks 208.

In 2019, under the condition that the revenue is not dominant, Vanke's net profit will reach 5.6 billion US dollars, which is almost the same as that of country garden, which ranks the top. The profits of Evergrande, Greenland and poly are about 2-2.5 billion US dollars. The net profit rate of Vanke reaches 10.6%, which is the highest among the five enterprises. As of the end of 2019, the net debt ratio of Vanke is only 33.87%, which is lower than that of other companies, which is extremely low in the industry Position, this reflects that, as a leader for many years, Vanke's profitability and risk control ability are very strong.

Country garden is also working in the direction of Vanke, in addition to revenue, has been committed to improving the management level and profitability.

It is worth noting that, with the real estate sales ceiling appearing, although the amount is increasing, the sales growth rate and net profit growth rate of country garden and other super giants are narrowing, which means that they need to have more new growth points if they want to maintain the growth of revenue scale and maintain their position in the world's top 500.

Since Vanke started the strategy of urban supporting service providers in 2012, the diversified transformation led by leading real estate enterprises has entered a climax.

Vanke insists on business development around the main real estate business. In 2018, Vanke upgraded its strategy to "urban and rural construction and living service provider", and has arranged long-term rental apartments, logistics, commerce, vacation, agriculture and other fields.

And Biguiyuan, Evergrande's transformation has made greater strides.

This year, Evergrande has fully implemented the new strategy of "high growth, scale control and debt reduction". Not long ago, Evergrande launched six "hengchi" models to seize the global new energy vehicle market.

Country garden also established bozhilin robot company as early as July 2018 to enter into science and technology. Yang Guoqiang, chairman of country garden, expects the company to become a leading high-tech comprehensive enterprise in the world.

These new businesses have not contributed to revenue in the short term, but over time, real estate companies expect that new businesses will bring more revenue and profit growth.

At that time, they will accept a new test of the Fortune 500.

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